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Calcutta High Court · body

2013 DIGILAW 93 (CAL)

Commissioner of Customs v. LGW Ltd.

2013-02-13

ARUN MISHRA, JOYMALYA BAGCHI

body2013
ORDER Arun Mishra, C.J. 1. The appeal questions the legality of the order passed by a Single Bench allowing the writ petition filed by the respondent. There was dispute with respect to the goods presented for the purpose of clearance, physical verification of the goods as envisaged under Section 51 of the Customs Act. The clearance has to be made after goods are physically verified as provided in Customs Manual Chapter 3(II)40 to 245. It is not in dispute in the instant case that export of raw cotton (5021), Cotton Waste (5202) and Cotton, carded or combed (5203) was allowed. For this purpose a press note was issued by the Government of India, Ministry of Textiles, Office of Textile Commissioner on 30-9-2010. It was mentioned in the press note with reference to the earlier press note dated 15-9-2010 that process of registration of company to export of raw cotton (5201), cotton waste (5202), and cotton carded or combed (5203) for export authorisation will be made. The Ministry of Textile has conveyed decision taken by group of ministers in their meeting dated 28-9-2010 to the effect that actual export i.e. shipment would commence from 1-11-2010. The exportable surplus was identified as 55 lac bales in respect of raw cotton (5201). No registration to be made after the exportable surplus is reached. It was also mentioned that the 45 days of shipment period allowed, would be reckoned from the date of issue of EARC or 15-12-2010 whichever is later. This shipment period could not have been later than 15-12-2010. 2. The petitioner admittedly applied for registration and Export Authorisation Registration Certificate, in short EARC was issued to him on 12-10-2010 and 13-10-2010 with respect of raw cotton 5201. For the purpose of export the registration was valid up to 15-12-2010. Thus the last date by which export was to be completed under the EARC was 15-12-2010. 3. The petitioner admittedly presented bill of export between 4-12-2010 and 14-12-2010. However, goods were presented for physical verification on 16-12-2010. They were not cleared for export as validity of EARC had expired on 15-12-2010. Thus the last date by which export was to be completed under the EARC was 15-12-2010. 3. The petitioner admittedly presented bill of export between 4-12-2010 and 14-12-2010. However, goods were presented for physical verification on 16-12-2010. They were not cleared for export as validity of EARC had expired on 15-12-2010. The instruction was sought by the Commissioner of Customs, West Bengal from Ministry of Textiles by sending a fax message dated 16-12-2010 in which it was mentioned that whether the goods covered under bill of export filed with the land customs stations on or before 15-12-2010 and duly appraised can be allowed to be exported. It was observed by Ministry of Textiles that filing of bill of export with land custom stations is a procedural document and a part of "various formalities" to be followed right form handling of the goods by the exporters for shipment "till the goods under reference is cleared at the border". Thus permission was not accorded and it was observed that the clarifications may be obtained from their parent administrative ministry i.e. Ministry of Finance, Department of Revenue. Ultimately the goods were not cleared under Section 51 of the Customs Act on the ground that goods were presented on 16-12-2010 for physical verification after the expiry of period of EARC on 15-12-2010. 4. In the petition filed before the Single Bench by the petitioner exporter it is averred that it had completed all the formalities of presentation of bill of export etc. which were required. The export authorisation certificate was issued during October, 2010 was valid for a period up to 45 days from the date of registration or date of allowing export as the case may be. In the circumstances unless the goods are exported within 45 days of registration the export becomes void and no export is possible beyond the period stipulated in the said EARCs. Actual date of commencement of export was from 1-11-2010 and EARC was valid for 45 days i.e. up to 15-12-2010. The petitioner further averred in paragraph 18 of the petition that goods are exported by the petitioner to the Bangladesh through Petropol Land Customs Station in the State of West Bengal. The Land Customs Station is highly congested without adequate infrastructure and virtually controlled by the local mafias who decides the fate of the exporters and consignments. The petitioner further averred in paragraph 18 of the petition that goods are exported by the petitioner to the Bangladesh through Petropol Land Customs Station in the State of West Bengal. The Land Customs Station is highly congested without adequate infrastructure and virtually controlled by the local mafias who decides the fate of the exporters and consignments. The petitioner has made several representations before the concerned local authorities for improving the said condition but the representation has fallen on deaf years. The petitioner has referred certain newspaper reports. 5. It is further averred in the petition that EARC issued by concerned authorities were duly debited upon passing of the relative shipping/bills of export by the concerned Superintendent of Customs Petropol Land Customs Station and the documents in respect of such export was lying ready. The goods were also ready in trucks for export to Bangladesh. However, soon after expiry of 15th December, 2010 the respondent Customs Authorities refused to allow consignment to pass Bangladesh through Petropol Land Customs Station. Such action of the respondent authorities is absolutely arbitrary and it was due to heavy congestion at the Petropol Land Customs Station the Goods could not cross the border by 15-12-2010. Thus, in spite of petitioner having valid documents, there was a refusal to permit export of raw cottons. 6. Section 51 of the Customs Act empowers the Proper Officer to allow the clearance and loading of goods for exportation if the said goods are not prohibited goods and otherwise exportable in every sense. However, the export was refused illegally in spite of valid documents. The petitioner came to know that a fax message was sent by the Customs authorities for clarification from the Textile Commissioner as to whether they should allow export of raw cotton after 15-12-2010 where EARCs have been debited by them. Therefore the aforesaid clarification was sent by the Textile Ministry. The petitioner should have been permitted to export the goods covered under EARCs even after expiry of 15th December, 2010. It was incumbent upon the respondent authorities to allow the export of the goods as all formalities were observed by the petitioner in all respects. 7. Therefore the aforesaid clarification was sent by the Textile Ministry. The petitioner should have been permitted to export the goods covered under EARCs even after expiry of 15th December, 2010. It was incumbent upon the respondent authorities to allow the export of the goods as all formalities were observed by the petitioner in all respects. 7. In the affidavit in opposition, it was contended by the Department that the export was to be completed by 15-12-2010 within the validity period of EARCs when the petitioners' goods/consignments was appraised there was an endorsement made which reads as follows: Please inspect the consignment and verify Marks and Nos. thereon and certify whether those agreed with the Invoice P/List & B/E (2) Open & Examine any 5% of your choice and see that the goods are as per invoice, Packing List & Bill of Export (3) Allow Export, if found in order in all respect. 8. It was further contended in para-5(k) to the effect that - "In the instant case, when the goods were inspected for exports the said licence, of the petitioner had expired." The reference is to validity of Export Authorization Registration Certificate. 9. It was further contended in paragraph 8 to the following effect: The said goods of the petitioner was inspected by the Customs authorities only after they arrived at the customs station on 16-12-2010 and on that date the said Licence of the petitioner had expired. As the Licence had expired the goods of the petitioner would not be allowed to be exported. 10. In the reply filed by the petitioner to the affidavit in opposition, the petitioner has not denied the aforesaid specific statement made in the affidavit in opposition. The denial is general and there is no specific denial of material fact that the goods were presented for physical examination on 16-12-2010. Though aforesaid aspect was specifically pleaded in the affidavit in opposition as main ground there was only reiteration in reply to opposition that all requisite formalities were completed by the petitioner and there was nothing required to be done. There was no specific denial to the aforesaid ground which was the only ground taken in the affidavit in opposition so as to deny the export. It has to be taken that there was no specific denial. 11. There was no specific denial to the aforesaid ground which was the only ground taken in the affidavit in opposition so as to deny the export. It has to be taken that there was no specific denial. 11. The Single Bench allowed the writ application mainly on the ground that goods are to be deemed to have been exported as soon as the goods are cleared for export and loaded into vessels and are outside the control of the exporter. The bills of export were presented from 4-12-2010 to 14-12-2012 the single judge observed that it was not necessary to adjudicate the factual issue of whether the goods could not cross the Indo-Bangladesh border within 15th December, 2010 by reason of congestion as alleged by the petitioners. On the ground that the goods had been entered and cleared for exportation under Sections 50 and 51 of the Customs Act within the validity period of EARCs. It has been observed that goods covered by EARCs had been cleared for export under Section 51 subject however to checking to see whether the goods were as per declaration in the invoice, packing list and bill of export etc. Thereafter the single Judge has not adverted to the issue when goods were in fact presented for the purpose of physical verification, to ensure whether the goods were as per declaration in the invoice, packing list and bill of export and that validity of EARCs had expired. The relief has been granted on the interpretation of Sections 50 and 51 of the Customs Act. It has been also observed that an exporter could not be made to suffer by reason of non clearance of the goods and by reason of cross check zone. However, no specific finding has been recorded on the material aspect when goods were taken to the customs station and presented for physical examination. 12. Impugning the order passed by Single Bench the intra Court appeal has been preferred by the Customs Authority. 13. Mr. Roy Chowdhury, learned senior counsel appearing on behalf of the Customs Authority has contended that there was no complete clearance of the goods as per provisions contained in Section 51 of the Customs Act. Procedure for export, process of shipping bill, arrival of goods have been dealt with in paragraph 38 to 45 of the CBSE Customs Manual in Chapter 3(II) relating to the export. Procedure for export, process of shipping bill, arrival of goods have been dealt with in paragraph 38 to 45 of the CBSE Customs Manual in Chapter 3(II) relating to the export. According to the provision, physical verification is one of the essential ingredients so as to permit the export. Without that export cannot be permitted. In the instant case goods were presented on 16th December, 2012 after expiry of the validity period of EARCs. Thus export could not have been allowed. The guidance was sought from the Ministry of Textiles. However, clearance was not given. It was observed that presentation of the bill of export is only one of the export requirement, there are other various formalities which have to be followed. It was advised to take further instructions from the Ministry of Finance. In the circumstances, as goods were presented on 16th December, 2010, they could not have been permitted to be exported. The Single Bench has not gone into various material aspects of the case. In spite of specific pleadings made in the affidavit in opposition, as to presentation of goods for physical verification on 16-12-2010, they were not specifically denied in the reply filed by the petitioner. 14. Sri Ghosh, learned Senior Counsel appearing on behalf of the exporter, contended that all formalities were completed. It was also submitted that even physical verification was done, as is apparent from the endorsement on one of the EARC. He has relied upon a document at page 154 of the Paper Book to contend that, in fact, inspection of consignment was done by the cargo inspector. Thus, in case due to congestion goods could not cross the border/check-post, the petitioner could not have been held responsible as whatever was in his capacity/control was done. 15. He has relied upon the decision of the Hon'ble Supreme Court in the case of Collector of Customs, Calcutta v. Sun Industries, reported in 1988 (35) E.L.T. 241 (S.C.) and decision of the High Court of Madras in the case of Lucas TVS, Madras v. Assistant Collector of Customs, Madras & Ors., reported in 1987 (28) E.L.T. 266 (Mad.). He has further submitted that in view of the findings recorded by the Single Bench in the order passed by the Single Bench, no case for interference in the appeal is made out. He has further submitted that in view of the findings recorded by the Single Bench in the order passed by the Single Bench, no case for interference in the appeal is made out. He has also referred to the provisions contained in Sections 16, 17, 50 and 51 of the Customs Act, 1962 (hereinafter referred to as the Act). 16. When we consider the relevant provisions contained in the Act, Section 16(1)(a) provides that in case of duty is leviable, the rate of duty and tariff valuation, if any, applicable to any export goods, shall be the rate and valuation in force, in the case of goods entered for export under Section 50, on the date on which the proper officer makes an order permitting clearance and loading of the goods for exportation under Section 51. Thus clearance and loading of the goods for exportation under Section 51 is the date on which the proper officer passes such an order of clearance and loading of goods under Section 51. Question is whether the clearance is completed merely on the presentation of the bill of export and EARCs and presentation of the goods within validity period of EARCs for the purpose of physical verification is not necessary. 17. Assessment of duty is dealt with under Section 17 of the Act. Under Section 17, assessment has to be made after an exporter has entered any export goods under Section 50. The goods have to be examined and tested by the proper officer. Under Section 17(2) of the Act, after such examination and testing, the duty, if any, leviable on such goods shall, save as otherwise provided in Section 85 be assessed. The provisions contained in Sections 17(1) and 17(2) make "examination of the goods and testing" as mandatory requirement, in both cases where duty is leviable or not leviable on such goods. Other procedural aspects for assessment have been provided in Section 17(3). Section 17(4) deals with the provisional assessment subject to examination or testing of the goods. Provisions contained in Section 17 being relevant read thus:- 17. Other procedural aspects for assessment have been provided in Section 17(3). Section 17(4) deals with the provisional assessment subject to examination or testing of the goods. Provisions contained in Section 17 being relevant read thus:- 17. Assessment of duty.- (1) After an importer has entered any imported goods under section 46 or an exporter has entered any export goods under Section 50 the imported goods or the export goods, as the case may be, or such part thereof as may necessary, without undue delay, be examined and tested by the proper officer. (2) After such examination and testing, the duty, if any, leviable on such goods shall, save as otherwise provided in Section 85, be assessed, (3) For the purpose of assessing duty under sub-section (2), the proper officer may require the importer, exporter or any other person to produce any contract, broker's note, policy of insurance, catalogue or other document whereby the duty leviable on the imported goods or export goods, as the case may be, can be ascertained, and to furnish any information required for such ascertainment which is in his power to produce or furnish, and thereupon the importer, exporter or such other person shall produce such document and furnish such information. (4) Notwithstanding anything contained in this section, imported goods or export goods may, prior to the examination of testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. (5) Where any assessment done under sub-section (2) is contrary to the claim of the importer or exporter regarding valuation of goods, classification, exemption or concessions of duty availed consequent to any notification therefore under this Act, and in cases other than those where the importer or the exporter, as the case may be, confirms his acceptance of the said assessment in writing, the proper officer shall pass a speaking order within fifteen days from the date of assessment of the bill of entry or the shipping bill, as the case may be. 18. The provisions contained in Section 50 of the Act deals with the entry of goods for exportation. It is incumbent upon the exporter of any goods to make entry thereof by presenting to the proper officer in case the goods to be exported by road a bill of export in the prescribed form and shipping bill, in the case of goods to be exported in a vessel or aircraft. Section 50(2) of the Act provides that the exporter of any goods while presenting a bill of export shall at the foot thereof make and subscribe to a declaration as to the truth of its contents. Section 50 thus deals with the presentation of the documents for making entry of goods for the purpose of exportation. The bill of export is required to be produced and verified by the exporter in the manner prescribed in Section 50(2). Clearance of the goods for exportation is dealt with under Section 51 of the Act. It appears that the proper officer is to be satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under the Act in respect of the same. The proper officer on being satisfied as to aforesaid aspects may make an order permitting clearance and loading of the goods for exportation. However, final clearance and loading of the goods for exportation can be done only after physical verification and satisfaction that goods entered for export are not prohibited goods and goods can be finally released only after physical verification has been made and not before that. Sections 50 and 51 of the Act are quoted below:- 50. However, final clearance and loading of the goods for exportation can be done only after physical verification and satisfaction that goods entered for export are not prohibited goods and goods can be finally released only after physical verification has been made and not before that. Sections 50 and 51 of the Act are quoted below:- 50. Entry of goods for exportation.-(1) The exporter of any goods shall make entry thereof by presenting to the proper officer in the case of goods to be exported in a vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a bill of export in the prescribed form. (2) The exporter of any goods, while presenting a shipping bill or bill of export, shall at the foot thereof make and subscribe to a declaration as to the truth of its contents. 51. Clearance of goods for exportation. - Where the proper officer is satisfied that any goods entered for export are not prohibited goods and the exporter has paid the duty, if any, assessed thereon and any charges payable under this Act in respect of the same, the proper officer may make an order permitting clearance and loading of the goods for exportation. 19. The aforesaid provisions have to be read in conjunction with Sections 16 and 17 of the Act and the Procedure of Export provided in CBEC Customs Manual. Paragraph 38 whereof provides that the shipping bill or as the case may be, bills of export are required to be filed in format as prescribed in the Shipping Bill and Bill of Export (Form) Regulations, 1991. The bills of export is to be used if clearance of the export is taken at the land customs stations. 20. Similar procedure for clearance by land customs stations is adopted as prescribed for the purpose of shipping. Paragraphs 38, 40, 41, 42, 43, 44 and 45 are quoted below:- 38. Under manual system, shipping bills or, as the case may be, bills of export are required to be filled in format as prescribed in the Shipping Bill and Bill of Export (Form) Regulations, 1991. The bills of export are being used if clearance of export goods is taken at the Land Customs Stations. Different forms of shipping bill/bill of export have been prescribed for export of duty free goods, export of dutiable goods and export under drawback etc. The bills of export are being used if clearance of export goods is taken at the Land Customs Stations. Different forms of shipping bill/bill of export have been prescribed for export of duty free goods, export of dutiable goods and export under drawback etc. 40. Once, the shipping bill is passed by the Export Department, the exporter or his agent present the goods to the shed appraiser (export) in docks for examination. The said appraiser may mark the document to a Custom officer (usually an examiner) for examining the goods. The examination is carried out under the supervision of the shed appraiser (export). If the description and other particulars of the goods are found to be as declared, the shed appraiser gives a 'let export order', after which the exporter may contact the preventive superintendent for supervising the loading of goods on to the vessel. 41. In case the examining staff in the docks finds some discrepancy in the goods, they may mark the shipping bill back to export department/DEEC group with their observations as well as sample of goods, if needed. The export department re-considers the case and decide whether export can be allowed, or amendment in description, value etc. is required before export and whether any other action is required to be taken under the Customs Act, 1962 for mis-declaration of description of value etc. 42. Under EDI System, declarations in prescribed format are to be filed through the Service Centers of Customs. A checklist is generated for verification of data by the exporter/CHA. After verification, the data is submitted to the System by the Service Center operator and the System generates a Shipping Bill Number, which is endorsed on the printed checklist and returned to the exporter/CHA. For export items which are subject to export cess, the TR-6 challans for cess is printed and given by the Service Center to the exporter/CHA immediately after submission of shipping bill. The cess can be paid on the strength of the challan at the designated bank. No copy of shipping bill is made available to exporter/CHA at this stage. 43. The quota allocation label is required to be pasted on the export invoice. The allocation number of AEPC is to be entered in the system at the time of shipping bill entry. No copy of shipping bill is made available to exporter/CHA at this stage. 43. The quota allocation label is required to be pasted on the export invoice. The allocation number of AEPC is to be entered in the system at the time of shipping bill entry. The quota certification of export invoice needs to be submitted to Customs along with other original documents at the time of examination of the export cargo. For determining the validity date of the quota, the relevant date needs to be the date on which the full consignment is presented to the Customs for examination and duly recorded in the Computer System. In EDI System at Delhi Air cargo, the quota information is automatically verified from the AEPC/TEXPROCIL system. 44. Since the shipping bill is generated only after the 'let export order' is given by Customs, the exporter may make use of export invoice or such other document as required by the Octroi authorities for the purpose of Octroi exemption. 45. The goods brought for the purpose of examination and subsequent 'let export' is allowed entry to the Dock on the strength of the checklist and other declarations filed by the exporter in the Service Center. The Port authorities have to endorse the quantity of goods actually received on the reverse of the Check List. (Emphasis applied by us) 21. It is apparent from the aforesaid procedure that physical examination is sine qua non for ultimate clearance of the goods, without that goods cannot be permitted to be loaded for the purpose of shipment or transportation by road. 22. In the instance case, it is the categorical stand of the Customs authority in the affidavit in opposition that goods were presented for physical verification on 16th December, 2010, on which date it could not have been done due to expiry of validity of export authorization certificate. The specific plea taken in the affidavit-in-opposition that goods were presented for physical verification when the validity period of registration expired on 16th December, 2010 has not been controverted. In the absence of specific denial, there is only general denial and reiteration that all formalities had been completed cannot be said to be specific denial of the pleadings. Even otherwise contemporaneous conduct of the parties indicates that only bill of export was filed with the Land Customs Station before 15th December, 2010. In the absence of specific denial, there is only general denial and reiteration that all formalities had been completed cannot be said to be specific denial of the pleadings. Even otherwise contemporaneous conduct of the parties indicates that only bill of export was filed with the Land Customs Station before 15th December, 2010. Communication by Fax message was sent by the Commissioner of Customs to the Ministry of Textiles. In reply it was mentioned that filing of the bill of export with the Land Customs Station is one of the procedural requirements and only a part of the various formalities to be followed right from handing over of the goods by the exporter for shipment till the goods are cleared at the border, meaning thereby that other formalities were also required to be completed within validity period of EARCs. It was not the case at that stage that for physical verification goods were presented on or before 15th December, 2010 and not on 16-12-2010. Apart from that when we come to the endorsement made on the Bill of Export at page 154 of the Paper Book, we find that there is only endorsement as mentioned in paragraph 5J of the Return mentioning that consignment were still to be inspected and Verify Marks and Numbers thereon and certify whether those agreed with the Invoice. 5% of the goods were to be checked so as to reach to the satisfaction for the purpose of grant of ultimate clearance and loading for export was to be allowed only in case if goods are found in order in all respects. There was another column which provided "inspected the consignment with the assistance of Cargo Inspector." This was not in fact done and signed by anybody on behalf of the Customs as no such verification was made as per the categorical stand taken in paragraph 3G of the affidavit in opposition and 5K as well as in paragraph 8 thereof. It was clearly stated that when the goods were presented, the licence of the petitioner had expired and goods were inspected only after they arrived at Customs Station on 16th December, 2010. On that date licence of the petitioner had expired. It was clearly stated that when the goods were presented, the licence of the petitioner had expired and goods were inspected only after they arrived at Customs Station on 16th December, 2010. On that date licence of the petitioner had expired. When goods were presented on 16-12-2010 when validity of EARCs had expired even if physical verification is made after expiry of validity period by export authorities, export could not have been permitted as per provisions contained in the Act. 23. It is apparent from the certificate of authorisation that various registrations for export of goods were valid upto 15th December, 2010. Even as per the Scheme under which export of aforesaid Raw Cotton (5201) was allowed provided for 45 days of shipment period to be reckoned from the date of issue of EARC or 15th December, 2010, whichever is later and shipment was permitted with effect from 1st November, 2010 for a period of 45 days and otherwise also 15th December, 2010 was the terminal date for the purpose of export under export authorisation registration certificates. Thus export had not taken place within validity of EARCs by 15th December, 2010. Thus when the goods were presented for physical verification on 16th December, 2010 and as the validity of EARCs had expired, no export could have been made under the void EARCs, as also rightly pointed out in paragraph 16 in the petition by the petitioners. In paragraph 16 of the petition, the petitioners have rightly pleaded that unless the goods are exported within 45 days of registration of the said EARCs, the export becomes void and no export is possible beyond the period stipulated in the said EARCs. 24. The validity of the EARCs expired on December 15, 2010. Thus in the absence of physical verification of the goods, which is a sine qua non for valid clearance, within validity period of EARCs. and endorsements are made that the goods tallied with the bills of export, in our opinion no export could have taken place under the EARCs which were issued in favour of the petitioners, as validity expired on December 15, 2010. 25. The Single Bench has failed to properly appreciate the provisions contained in Sections 17 and 51 of the Act. and endorsements are made that the goods tallied with the bills of export, in our opinion no export could have taken place under the EARCs which were issued in favour of the petitioners, as validity expired on December 15, 2010. 25. The Single Bench has failed to properly appreciate the provisions contained in Sections 17 and 51 of the Act. Section 17 of the Act emphasises examination of the goods even if duty is not leviable and the provisions contained in Section 16 also reinforce our opinion that the date of determination of duty is when the order permitting clearance and loading of the goods for exportation under Section 16 is passed, is the clinching one. Physical verification of the goods is necessary for the purpose of final clearance and endorsement is required to be made for final clearance within validity period of export authorization; but no such endorsement had been made in the instant case. 26. Thus, it could not be said that the provisions of sub-sections (1) and (2) of Section 17 of the Act which provide for goods to be examined and tested by the proper office stood complied with in the instant case. Merely by presentation of the bills of export within validity period of EARCs., it could not have been successfully contended that the goods were examined and tested by the proper officer. The satisfaction envisaged in Section 51 is not capable of being reached finally without such examination and testing by the proper officer even if the duty is not leviable as provided for in Section 17(2) of the Act. 27. Section 17(4) of the Act also makes it clear that there can be conditional assessment. The exported goods may, prior to the examination or testing thereof, be permitted by the proper officer to be assessed to duty on the basis of the statements made in the entry relating thereto and the documents produced and the information furnished under sub-section (3); but if it is found subsequently on examination or testing of the goods or otherwise that any statement in such entry or document or any information so furnished is not true in respect of any matter relevant to the assessment, the goods may, without prejudice to any other action which may be taken under this Act, be re-assessed to duty. The assessment is also not final without examination or testing of the goods. The assessment is also not final without examination or testing of the goods. That attains the finality on satisfaction having been reached with respect to the correctness of the entries made in the bills of export or the bills of shipping, as the case may be. 28. The EARCs validity period admittedly had expired, in the instant case, on December 15, 2010 and no export could be made after that date. The goods were not even physically verified before expiry of EARCs for the purpose of the export and thus there was no final clearance undertaken as envisaged in Section 17 read with Section 51 of the Act. As such, export was rightly disallowed. 29. Reliance has been placed on the decision of the Hon'ble Supreme Court in the case of The Collector of Customs, Calcutta v. Sun Industries (supra), wherein the question as to when the export was completed came up for consideration. The Tribunal found that the shipment was under CIF contract and that on the loading of the goods on board, the title passed to the purchaser. The Tribunal found that the ship left Calcutta and in fact it had passed beyond the territorial waters of India and the engine trouble developed while the ship was in the High Seas and, thus, by reason of the ship having passed beyond territorial waters with the goods on board, the export of the goods out of India had been completed. It appears that the fact that subsequently the ship decided to sail into the territorial waters was of no relevance. The Apex Court also referred to the decision in Lucas TVS v. Assistant Collector (supra). When the ship got clearance and moved out of the territorial waters, the export was complete. The title to the same goods passed to the purchaser. The facts as they emerge are that the goods reached a place in the high seas which is outside India and the title of the goods also passed to the purchasers. It is true that the goods did not land in any place because of the defect in the ship. But the expression "taking out to a place outside India" would also mean a place in high seas. It is beyond the territorial waters of India. 30. It is true that the goods did not land in any place because of the defect in the ship. But the expression "taking out to a place outside India" would also mean a place in high seas. It is beyond the territorial waters of India. 30. Thus, the Hon'ble Supreme Court came to the conclusion that there was export of the goods in terms of Section 75 of the Act. The fact that the ship was brought back to India because of damages in the ship does not affect the position. When we apply the ratio of the aforesaid case, the goods in the instant case did not go outside the territory of India, it could not be said that there could have been any export of the goods before examination and testing of the goods as provided in Section 17(2) of the Act as also paragraphs 38 to 45 of the Manual. Thus export was not complete by presentation of paper of bill of export before 15-12-2010. The procedures prescribed in paragraphs 38 to 45 of the Manual make it clear that examination of the goods is sine qua non for the clearance of the goods. In this case, the examination of the goods had not taken place and there was no final clearance. Only endorsement was made subject to the examination of the goods. That could not be said to be authorising the export after the lapse of the validity of the EARCs. 32. The decision of the Madras High Court in the case of Lucas TVS v. The Assistant Collector of Customs (supra), has also been relied upon wherein in the factual matrix, the goods were assessed for export duty and "examined" by the Customs Authorities. However, after the cargo was loaded in the vessel, there was a fire in the ship and some of the goods were destroyed. The High Court of Madras had held that the export was complete. The provisions of Sections 50 and 51 of the Act are determinative of time when the process of export commences and when the goods are loaded into the ship after clearance by the proper officer; they must be treated as having been exported so far as the exporter is concerned. 33. The provisions of Sections 50 and 51 of the Act are determinative of time when the process of export commences and when the goods are loaded into the ship after clearance by the proper officer; they must be treated as having been exported so far as the exporter is concerned. 33. When we consider that in the instant case, the goods were not "examined" by the Customs Authorities, hence we are unable to apply the ratio of the aforesaid decision moreover in the aforesaid case; the case was not that of the expiration of the validity of the EARCs. Thus, the decision of Lucas TVS (supra) is of no help to the exporter. 34. In view of the aforesaid discussion, we are of the considered opinion that the Customs Authorities were right in not clearing the goods for the purpose of export as the goods had not been examined exported within the validity period of the Export Authorization Registration Certifications, the validity of which stood expired on December 15, 2010, and thereafter there could not have been any export made under those EARCs. 35. Accordingly, we allow the appeal and set aside the order passed by the learned Single Bench. There will be no order as to costs. Appeal allowed